Walmart Inc.

Results of Operations

Consolidated Results of Operations

(1)Membership and other income includes membership fees and other items such as rental and tenant income, recycling income, gift card breakage income, as well as other income from corporate campus facilities.

(2)Gross profit is defined as net sales less cost of sales. Operating expenses refers to operating, selling, general and administrative expenses.

Our total revenues increased $12.1 billion or 7.3% for the three months ended April 30, 2026 when compared to the same period in the previous fiscal year. The increase was primarily due to strong positive comparable sales in our U.S. segments and international markets driven by growth in transactions. eCommerce net sales grew $8.5 billion or 26% primarily driven by store and club-fulfilled delivery. Net sales growth also reflected strong sales in grocery and general merchandise across our segments. Net sales for the three months ended April 30, 2026 were positively affected by $2.3 billion in currency exchange rate fluctuations.

Membership and other income increased $0.4 billion or 27.0% for the three months ended April 30, 2026, reflecting 17.4% growth in membership fee revenue with strength across membership programs globally. Additionally, other income for the three months ended April 30, 2026 benefited from certain miscellaneous income items, none of which are individually material.

Gross profit rate increased 6 basis points for the three months ended April 30, 2026, when compared to the same period in the previous fiscal year, primarily due to the Walmart U.S. segment, driven by merchandise mix shifts and growth in higher margin businesses, including advertising, partially offset by higher fuel costs within our supply chain and increased eCommerce fulfillment costs in the Sam's Club U.S. segment.

Operating expenses as a percentage of net sales increased 33 basis points for the three months ended April 30, 2026, when compared to the same period in the previous fiscal year, primarily driven by higher depreciation related to our capital investments, certain business reorganization charges of $0.2 billion within the Walmart U.S. segment and Corporate and support related to strategic efforts to align our global platforms, as well as higher associate healthcare benefit costs related to increased enrollment and medical cost inflation in the U.S.

Other gains and losses consist of certain non-operating items, such as the change in the fair value of our investments and gains or losses on business dispositions, which by their nature can fluctuate from period to period. Other gains and losses for the three months ended April 30, 2026 consisted of net gains of $0.3 billion, compared to net losses of $0.6 billion for the same period in the previous fiscal year. These net gains and losses primarily consisted of changes in fair value of our equity and other investments driven by changes in their underlying stock prices.

Our effective income tax rate was 23.2% for the three months ended April 30, 2026, compared to 22.6% for the same period in the previous fiscal year. Our effective income tax rate may fluctuate as a result of various factors, including changes in our assessment of unrecognized tax benefits, valuation allowances, business operations, acquisitions, investments, entry into new businesses and geographies, intercompany transactions, changes in tax law, changes in the administrative practices, principles, and interpretations related to tax and the mix and size of earnings among our U.S. operations and international operations, which are subject to statutory rates that may be different than the U.S. statutory rate.

As a result of the factors discussed above, consolidated net income increased $0.9 billion for the three months ended April 30, 2026, when compared to the same period in the previous fiscal year. Accordingly, diluted net income per common share attributable to Walmart was $0.67 for the three months ended April 30, 2026, which represents an increase of $0.11 when compared to the same period in the previous fiscal year.

Walmart U.S. Segment

Net sales for the Walmart U.S. segment increased $5.0 billion or 4.5% for the three months ended April 30, 2026, when compared to the same period in the previous fiscal year. The increase was due to comparable sales of 4.3% for the three months ended April 30, 2026, driven by growth in transactions and average ticket, reflecting strength in grocery and general merchandise. The Walmart U.S. segment's eCommerce net sales positively contributed approximately 5.2% to comparable sales for the three months ended April 30, 2026. This growth reflects continued strength in customer and Walmart+ member engagement with omnichannel offerings, which was primarily driven by store-fulfilled delivery.

Membership and other income increased 45.6% for the three months ended April 30, 2026, primarily driven by increases in certain miscellaneous income items, as well as double-digit percentage growth in membership fee revenue from Walmart+.

Gross profit rate increased 29 basis points for the three months ended April 30, 2026, when compared to the same period in the previous fiscal year. The increase was primarily driven by merchandise mix shifts and growth in higher margin businesses, including advertising, partially offset by higher fuel costs within our supply chain.

Operating expenses as a percentage of net sales increased 56 basis points for the three months ended April 30, 2026, when compared to the same period in the previous fiscal year. The increase was primarily due to increased depreciation expense related to our continued capital investments, higher associate healthcare benefit costs related to increased enrollment and medical cost inflation, as well as business reorganization charges.

As a result of the factors discussed above, operating income increased $0.2 billion for the three months ended April 30, 2026, when compared to the same period in the previous fiscal year.

Walmart International Segment

Net sales for the Walmart International segment increased $5.4 billion or 18.0% for the three months ended April 30, 2026, when compared to the same period in the previous fiscal year. The increase was primarily due to positive comparable sales across our international markets, including strong eCommerce growth of $2.0 billion, and positive fluctuations in currency exchange rates of $2.3 billion.

Gross profit rate was flat for the three months ended April 30, 2026, when compared to the same period in the previous fiscal year. The rate benefitted from improved eCommerce margins and business mix shifts, offset by ongoing format mix shifts.

Operating expenses as a percentage of net sales decreased 28 basis points for the three months ended April 30, 2026, when compared to the same period in the previous fiscal year, primarily due to disciplined cost controls and ongoing format mix shifts, partially offset by investments in strategic growth priorities in our Canada and Mexico markets.

As a result of the factors discussed above, operating income increased $0.3 billion for the three months ended April 30, 2026, when compared to the same period in the previous fiscal year.

Sam's Club U.S. Segment

(1)We believe the Excluding Fuel information is useful to investors because it permits investors to understand the effect of the Sam's Club U.S. segment's fuel sales on its results of operations, which are impacted by the volatility of fuel prices. Volatility in fuel prices may continue to impact the operating results of the Sam's Club U.S. segment in the future.

Net sales for the Sam's Club U.S. segment increased $1.3 billion or 6.1% for the three months ended April 30, 2026, when compared to the same period in the previous fiscal year. The increase was primarily due to comparable sales, including fuel, of 5.9% for the three months ended April 30, 2026, with growth in transactions and unit volumes, reflecting strength in grocery and general merchandise. Additionally, higher fuel sales, driven by higher fuel prices and volumes, positively impacted comparable sales by 2.1% for three months ended April 30, 2026. Sam's Club U.S. eCommerce net sales positively contributed approximately 3.1% to comparable sales for the three months ended April 30, 2026, reflecting continued strength in member engagement with omnichannel offerings, such as club-fulfilled delivery.

Membership and other income increased 11.0% for the three months ended April 30, 2026, when compared to the same period in the previous fiscal year. The increase was primarily due to growth in the membership base and Plus penetration, as well as increases in certain miscellaneous income items. Effective May 1, 2026, Sam's Club U.S. increased its annual membership fees for Club and Plus memberships from $50 to $60 and from $110 to $120, respectively. The fee increase will benefit membership and other income in future periods, as membership fees are deferred and recognized ratably over the one-year membership term.

Gross profit rate decreased 26 basis points for the three months ended April 30, 2026, when compared to the same period in the previous fiscal year. The decrease was primarily due to increased eCommerce fulfillment costs, driven by club-fulfilled delivery.

Operating expenses as a percentage of net sales was flat for the three months ended April 30, 2026, when compared to the same period in the previous fiscal year. The rate benefitted from higher fuel sales, offset by increased costs related to club-fulfillment of delivery orders and higher associate healthcare benefit costs related to increased enrollment and medical cost inflation.

As a result of the factors discussed above, operating income increased slightly for the three months ended April 30, 2026, when compared to the same period in the previous fiscal year.